Tokyo Gas Warns of Overseas Impairments

Japanese utility Tokyo Gas expects to book a yen 28.4bn ($264mn) impairment in the first quarter, after re-evaluating the value of its US shale assets and the Ichthys LNG project in Australia, it warned on April 23.

Around yen 12.1bn of the charge relates to its tight-sand shale gas development business in east Texas, whereas yen 5.9bn is connected with its shale gas operations in the Barnett basin of Texas. A further yen 10.4bn was slashed from the value of Ichthys LNG, off western Australia.

Tokyo Gas has also lowered its forecast for net income in the year ending March 31 by 44.2% to yen 43bn. The new guidance represents a 8.9% decline from the previous 12-month period. The company has also cut its forecasts for operating profit from yen 113 to 101bn and net sales from yen 1.974 to 1.925 trillion.

The company unveiled a new three-year plan in March, announcing it would seek to increase its LNG trading activity.